Linear polarisation can adversely affect metering and autofocusing in EOS cameras. Circular polarisation prevents this. A polarising filter blocks a lot of the light being reflected from water droplets in the air, allowing the deeper, saturated colour of the sky to show through. It can also cut out the reflections from non-metallic surfaces such as glass and water, letting you see the subject beyond. For the same reason, glossy paint looks a lot more saturated (good when photographing cars).
The best effects come at a shooting angle of 90° (for blue skies) and about 45° to a non-metallic surface (to remove reflections). Ideal for digital and film photography.